##### Table of Contents

---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549



---



FORM 10-QSB



---



Quarterly Report Under Section 13 or 15(d)

of the Securities Exchange Act of
1934



|                                              |  |                               
|--------------------------------------------- |  | ------------------------------
|For the quarterly period ended March 31, 2005 |  | Commission file number 0-15070



---



REGENERX BIOPHARMACEUTICALS, INC.

(Exact name of small business issuer as specified in its charter)



---



|                         |  |                           
|------------------------ |  | --------------------------
|Delaware                 |  | 52-1253406                
|(State of Incorporation) |  | (IRS Employer I.D. Number)



3 Bethesda Metro
Center

Suite 630

Bethesda, Maryland 20814

(Address of principal executive offices)



Issuers telephone number, including area code: (301) 280-1992



---



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈



36,049,203 shares of RegeneRx Biopharmaceuticals, Inc. Common Stock, par value $.001 per share, were outstanding as of April 30, 2005.



Transitional Small Business Disclosure Format (Check
One)    Yes ̈No  x



---



---

##### Table of Contents

RegeneRx Biopharmaceuticals, Inc.

Form 10-QSB

Quarterly Period Ended March 31, 2005



INDEX



|           |  |                       |  |                                                                                                               |  |         
|---------- |  | --------------------- |  | ------------------------------------------------------------------------------------------------------------- |  | --------
|           |  |                       |  |                                                                                                               |  | Page No.
|Part I.    |  | Financial Information |  |                                                                                                              
|           |  |                       | 
|           |  | Item 1.               |  | Financial Statements                                                                                          |  |         
|           |  |                       | 
|           |  |                       |  | Balance Sheets at March 31, 2005 (unaudited) and December 31, 2004                                            |  | 3       
|           |  |                       | 
|           |  |                       |  | Statements of Operations for the three months ended March 31, 2005 (unaudited) and March 31, 2004 (unaudited) |  | 4       
|           |  |                       | 
|           |  |                       |  | Statements of Cash Flows for the three months ended March 31, 2005 (unaudited) and March 31, 2004 (unaudited) |  | 5       
|           |  |                       | 
|           |  |                       |  | Notes to Financial Statements (unaudited)                                                                     |  | 6-8     
|           |  |                       | 
|           |  | Item 2.               |  | Managements Discussion and Analysis or Plan of Operation                                                     |  | 9-11    
|           |  |                       | 
|           |  | Item 3.               |  | Controls and Procedures                                                                                       |  | 11      
|           |  |                      
|Part II.   |  | Other Information     |  |                                                                                                              
|           |  |                       | 
|           |  | Item 1.               |  | Legal Proceedings                                                                                             |  | 11      
|           |  |                       | 
|           |  | Item 2.               |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                   |  | 11      
|           |  |                       | 
|           |  | Item 3.               |  | Defaults Upon Senior Securities                                                                               |  | 11      
|           |  |                       | 
|           |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                                           |  | 11      
|           |  |                       | 
|           |  | Item 5.               |  | Other Information                                                                                             |  | 11      
|           |  |                       | 
|           |  | Item 6.               |  | Exhibits                                                                                                      |  | 12-13   
|           | 
|Signatures |  | 14                   



2



---

##### Table of Contents

P
ART I  FINANCIAL INFORMATION



Item 1. Financial Statements



RegeneRx Biopharmaceuticals, Inc.

Balance Sheets



|                                                                                                                                       |  |                |             |   |                   |   |             |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                                                                                                       |  | March 31, 2005 |             |   | December 31, 2004 |  
|                                                                                                                                       |  | (unaudited)    |             |   |                   |  
|ASSETS                                                                                                                                 |  |                |             |   |                   |   |             |  
|                                                                                                                                       |  |               
|Current assets                                                                                                                         |  |                |             |   |                   |   |             |  
|Cash and cash equivalents                                                                                                              |  | $              | 6,223,078   |   |                   | $ | 2,874,260   |  
|Due from related parties                                                                                                               |  |                | 11,620      |   |                   |   | 12,357      |  
|Deferred offering costs                                                                                                                |  |                |            |   |                   |   | 75,884      |  
|Other current assets                                                                                                                   |  |                | 78,801      |   |                   |   | 30,338      |  
|                                                                                                                                       |  |                |             |   |                   |   |             |  
|Total current assets                                                                                                                   |  |                | 6,313,499   |   |                   |   | 2,992,839   |  
|                                                                                                                                       |  |               
|Fixed assets, net                                                                                                                      |  |                | 59,856      |   |                   |   | 2,587       |  
|Proprietary rights, net                                                                                                                |  |                | 20,994      |   |                   |   | 21,440      |  
|Deferred patent costs                                                                                                                  |  |                | 354,663     |   |                   |   | 271,635     |  
|Other assets                                                                                                                           |  |                | 17,078      |   |                   |   |            |  
|                                                                                                                                       |  |                |             |   |                   |   |             |  
|Total assets                                                                                                                           |  | $              | 6,766,090   |   |                   | $ | 3,288,501   |  
|                                                                                                                                       |  |                |             |   |                   |   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                   |  |                |             |   |                   |   |             |  
|                                                                                                                                       |  |               
|Current liabilities                                                                                                                    |  |                |             |   |                   |   |             |  
|Accounts payable                                                                                                                       |  | $              | 175,451     |   |                   | $ | 405,997     |  
|Accrued expenses                                                                                                                       |  |                | 222,766     |   |                   |   | 173,925     |  
|                                                                                                                                       |  |                |             |   |                   |   |             |  
|Total current liabilities                                                                                                              |  |                | 398,217     |   |                   |   | 579,922     |  
|                                                                                                                                       |  |                |             |   |                   |   |             |  
|Commitments                                                                                                                            |  |                |            |   |                   |   |            |  
|                                                                                                                                       |  |               
|Stockholders equity                                                                                                                   |  |                |             |   |                   |   |             |  
|Preferred stock, $.001 par value per share, 1,000,000 authorized; no shares issued                                                     |  |                |            |   |                   |   |            |  
|Common stock, par value $.001 per share, 100,000,000 shares authorized; 36,029,203 and 34,577,356 issued and outstanding,
respectively |  |                | 36,029      |   |                   |   | 34,577      |  
|Additional paid-in capital                                                                                                             |  |                | 49,735,796  |   |                   |   | 45,179,591  |  
|Accumulated deficit                                                                                                                    |  |                | (43,403,952 | ) |                   |   | (42,505,589 | )
|                                                                                                                                       |  |                |             |   |                   |   |             |  
|Total stockholders equity                                                                                                             |  |                | 6,367,873   |   |                   |   | 2,708,579   |  
|                                                                                                                                       |  |                |             |   |                   |   |             |  
|Total liabilities and stockholders equity                                                                                             |  | $              | 6,766,090   |   |                   | $ | 3,288,501   |  
|                                                                                                                                       |  |                |             |   |                   |   |             |  



The accompanying notes
are an integral part of these financial statements.



3



---

##### Table of Contents

RegeneRx Biopharmaceuticals, Inc.

Statements of Operations

(Unaudited)



|                                                     |  |                              |            |   |      |   |            |  
|---------------------------------------------------- |  | ---------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                     |  | Three-months ended March 31, |           
|                                                     |  | 2005                         |            |   | 2004 |  
|Revenues                                             |  | $                            |           |   |      | $ |           |  
|                                                     |  |                             
|Expenses                                             |  |                              |            |   |      |   |            |  
|Research and development                             |  |                              | 476,226    |   |      |   | 831,340    |  
|General and administrative                           |  |                              | 448,797    |   |      |   | 331,566    |  
|                                                     |  |                              |            |   |      |   |            |  
|Total Expenses                                       |  |                              | 925,023    |   |      |   | 1,162,906  |  
|                                                     |  |                              |            |   |      |   |            |  
|Operating loss                                       |  |                              | (925,023   | ) |      |   | (1,162,906 | )
|                                                     |  |                             
|Other income (expense)                               |  |                              |            |   |      |   |            |  
|Interest income                                      |  |                              | 26,660     |   |      |   | 3,624      |  
|Other expense                                        |  |                              |           |   |      |   | (30        | )
|                                                     |  |                              |            |   |      |   |            |  
|Total Other income                                   |  |                              | 26,660     |   |      |   | 3,594      |  
|                                                     |  |                              |            |   |      |   |            |  
|Net loss                                             |  | $                            | (898,363   | ) |      | $ | (1,159,312 | )
|                                                     |  |                              |            |   |      |   |            |  
|Basic and diluted net loss per common share          |  | $                            | (0.03      | ) |      | $ | (0.04      | )
|                                                     |  |                              |            |   |      |   |            |  
|Weighted average number of common shares outstanding |  |                              | 35,919,222 |   |      |   | 31,936,127 |  
|                                                     |  |                              |            |   |      |   |            |  



The accompanying notes
are an integral part of these financial statements.



4



---

##### Table of Contents

RegeneRx Biopharmaceuticals, Inc.

Statements of Cash Flows

(Unaudited)



|                                                                            |  |                              |            |   |      |   |            |  
|--------------------------------------------------------------------------- |  | ---------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                                            |  | Three-months ended March 31, |           
|                                                                            |  | 2005                         |            |   | 2004 |  
|Cash flows from operating activities:                                       |  |                              |            |   |      |   |            |  
|Net loss                                                                    |  | $                            | (898,363   | ) |      | $ | (1,159,312 | )
|                                                                            |  |                             
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                              |            |   |      |   |            |  
|Depreciation and amortization                                               |  |                              | 2,589      |   |      |   | 1,079      |  
|Compensation expense for stock options                                      |  |                              | 14,550     |   |      |   | 5,350      |  
|Changes in operating assets and liabilities:                                |  |                              |            |   |      |   |            |  
|(Increase) decrease:                                                        |  |                              |            |   |      |   |            |  
|Other current assets                                                        |  |                              | (48,463    | ) |      |   | 2,546      |  
|Due from related party                                                      |  |                              | 737        |   |      |   | 500        |  
|Other assets                                                                |  |                              | (17,078    | ) |      |   |           |  
|Increase (decrease):                                                        |  |                              |            |   |      |   |            |  
|Accounts payable                                                            |  |                              | (230,546   | ) |      |   | 124,379    |  
|Accrued expenses                                                            |  |                              | 124,725    |   |      |   | (74,109    | )
|                                                                            |  |                              |            |   |      |   |            |  
|Net cash used in operating activities                                       |  |                              | (1,051,849 | ) |      |   | (1,099,567 | )
|                                                                            |  |                              |            |   |      |   |            |  
|Cash flows from investing activities:                                       |  |                              |            |   |      |   |            |  
|Purchase of fixed assets                                                    |  |                              | (59,412    | ) |      |   | (1,598     | )
|Deferred patent costs                                                       |  |                              | (83,028    | ) |      |   |           |  
|                                                                            |  |                              |            |   |      |   |            |  
|Net cash used in investing activities                                       |  |                              | (142,440   | ) |      |   | (1,598     | )
|                                                                            |  |                              |            |   |      |   |            |  
|Cash flows from financing activities:                                       |  |                              |            |   |      |   |            |  
|Issuance of common stock                                                    |  |                              | 4,616,500  |   |      |   | 2,269,382  |  
|Proceeds from exercise of warrants                                          |  |                              | 2,500      |   |      |   |           |  
|Stock offering costs                                                        |  |                              | (75,893    | ) |      |   |           |  
|                                                                            |  |                              |            |   |      |   |            |  
|Net cash provided by financing activities                                   |  |                              | 4,543,107  |   |      |   | 2,269,382  |  
|                                                                            |  |                              |            |   |      |   |            |  
|Net increase in cash and cash equivalents                                   |  |                              | 3,348,818  |   |      |   | 1,168,217  |  
|                                                                            |  |                             
|Cash and cash equivalents, beginning of period                              |  |                              | 2,874,260  |   |      |   | 1,019,889  |  
|                                                                            |  |                              |            |   |      |   |            |  
|Cash and cash equivalents, end of period                                    |  | $                            | 6,223,078  |   |      | $ | 2,188,106  |  
|                                                                            |  |                              |            |   |      |   |            |  



The accompanying notes
are an integral part of these financial statements.



5



---

##### Table of Contents

RegeneRx Biopharmaceuticals, Inc.

Notes to Financial Statements

For the three-months ended March 31, 2005 and 2004 (Unaudited)



A. GENERAL



RegeneRx Biopharmaceuticals, Inc. (the Company), a Delaware corporation, was incorporated in 1982. The Company operates in a single industry segment focused
on biotechnology. In general, the biotechnology industry consists of researching and developing new pharmaceutical products for the treatment of diseases or conditions that arise as a result of infections, cancer, autoimmune disease and genetic
abnormalities. The Companys current primary business focus is the commercialization of Thymosin beta 4 (Tß4), a 43 amino acid peptide, as a therapeutic platform to accelerate the healing of injured tissue and non-healing wounds in dermal, ocular, and cardiovascular tissue, among other areas.



The Company currently has no products that have received regulatory approval. During 1997,
the Company entered into a Material Transfer Agreement - Cooperative Research and Development Agreement (CRADA) with the National Institutes of Health (NIH). In exchange for providing Tß4 and certain data, the Company
received an option to elect to negotiate for an exclusive or non-exclusive commercialization license from the NIH pursuant to a patent application filed by NIH in 1998. On February 6, 2001, the Company signed a licensing agreement with NIH whereby
the Company obtained an exclusive world-wide license to Tß4 under the patent application filed in 1998. In exchange for the exclusive license, the Company must make certain royalty and milestone payments to the NIH. To date, all payments due
have been made.



The Company anticipates incurring additional losses in the
future as it continues development of Tß4 and expands clinical trials for other indications of Tß4. To achieve profitability, the Company, alone or with others, must successfully develop and commercialize its technologies and proposed
products, conduct pre-clinical studies and clinical trials, obtain required regulatory approvals and successfully manufacture and market such technologies and proposed products. The time required to reach profitability is highly uncertain, and there
can be no assurance that the Company will be able to achieve profitability on a sustained basis, if at all.



The Company has incurred negative cash flows from operations since its inception. The Company has expended and expects to continue to expend in the future, substantial funds to complete its planned product development
efforts. The Company expects that its existing capital resources will be adequate to fund the Companys projected operations through March 31, 2006, based on current and projected expenditure levels. Management plans to continue to refine its
operations, control expenses, evaluate alternative methods to conduct its business, and seek available and attractive sources of financing and sharing of development costs through strategic collaboration agreements or other resources. Should
appropriate sources of financing not be available, management would delay certain clinical trials and research activities until such time as appropriate financing was available. There can be no assurance that the Companys financing efforts
will be successful. If adequate funds are not available, the Companys financial condition and results of operations will be materially and adversely affected.



Should the Company obtain substantial additional funding, other factors including competition, dependence on third parties, uncertainty
regarding patents, protection of proprietary rights, manufacturing of peptides and technology obsolescence could also have a significant impact on the Company and its operations.



B. FINANCIAL STATEMENTS



The Balance Sheet as of March 31, 2005, the Statements of Operations for the three-month
periods ended March 31, 2005 and March 31, 2004, and the Statements of Cash Flows for the three-month periods ended March 31, 2005 and March 31, 2004, have been prepared without audit. In the opinion of management, all adjustments necessary to
present fairly the financial position, results of operations, and cash flows at March 31, 2005 and March 31, 2004, and for the periods then ended, have been recorded. All adjustments recorded were of a normal recurring nature.



6



---

##### Table of Contents

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and pursuant to rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted
in the United States for complete financial statement presentation. In the opinion of management, such unaudited interim information reflects all necessary adjustments, consisting of only normal recurring adjustments, necessary to present the
Companys financial position and results of operations for the periods presented. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full fiscal year. These statements should be read
in conjunction with the financial statements and related notes included in the Companys Form 10-KSB for the year ended December 31, 2004.



The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reported period. Actual
results could differ from those estimates.



C.
NET LOSS PER SHARE



Net loss per share is based on the weighted average number of common shares outstanding during the three-month periods ended March 31, 2005 and March 31, 2004. During these periods options and warrants were not
included in the calculation as their effect would be anti-dilutive.



D. STOCK BASED COMPENSATION



In December 2002, the FASB issued Statement No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure. This statement amends SFAS No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of transition to SFAS No. 123s fair value method of accounting for stock-based employee compensation. SFAS No. 148 also amends the disclosure provisions in
SFAS No. 123 and APB Opinion No. 28, Interim Financial Reporting, to require disclosure in the summary of significant accounting policies of the effects of an entitys accounting policy with respect to stock-based employee
compensation on reported net income and earnings per share in annual and interim consolidated financial statements. The adoption of the disclosure only requirements of SFAS No. 148, did not have a significant impact on the Companys financial
statements.



The Company uses the intrinsic value method for stock option
grants to individuals defined as employees under which no compensation is recognized for options granted at or above the fair market value of the underlying stock on the grant date. The Company uses the fair value method for stock options granted
for services rendered by non-employees in accordance with the SFAS No. 123 Accounting for Stock Based Compensation.



The following table illustrates the effect on net loss and loss per share if the Company had applied the fair value recognition provisions of FASB Statement No. 123 to
stock-based employee compensation.



|                                                                                                           |  |                              |          |   |      |   |            |  
|---------------------------------------------------------------------------------------------------------- |  | ---------------------------- | -------- | - | ---- | - | ---------- | -
|                                                                                                           |  | Three Months Ended March 31, |         
|                                                                                                           |  | 2005                         |          |   | 2004 |  
|Pro forma net loss:                                                                                        |  |                              |          |   |      |   |            |  
|As reported                                                                                                |  | $                            | (898,363 | ) |      | $ | (1,159,312 | )
|Total employee non-cash stock compensation expense determined under fair value based method for all awards |  |                              | (1,059   | ) |      |   | (19,345    | )
|                                                                                                           |  |                              |          |   |      |   |            |  
|Pro forma net loss                                                                                         |  | $                            | (899,422 | ) |      | $ | (1,178,657 | )
|                                                                                                           |  |                              |          |   |      |   |            |  
|Net loss per common share:                                                                                 |  |                              |          |   |      |   |            |  
|Basic and dilutedas reported                                                                              |  | $                            | (0.03    | ) |      | $ | (0.04      | )
|                                                                                                           |  |                              |          |   |      |   |            |  
|Basic and dilutedpro forma                                                                                |  | $                            | (0.03    | ) |      | $ | (0.04      | )
|                                                                                                           |  |                              |          |   |      |   |            |  



7



---

##### Table of Contents

E. PATENTS



The Company has capitalized $83,028 and $-0- related to patent costs during the three months
ended March 31, 2005 and 2004, respectively. The Companys accounting policies for patents are as follows: (a) purchased patents are recorded at acquisition costs (legal fees from a successful defense are also capitalized ) and (b) internally
developed patents  the following costs are capitalized (1) legal fees from the costs incurred in successful defense (2) other patent fees (legal, registration) (3) models and drawings required for registration and legal defense. The legal life
of a patent is 20 years. Amortization commences the date the patent is awarded. All research and development costs incurred in developing the patentable idea are expensed as incurred.



F. EQUITY TRANSACTIONS



Sale of Common Stock and Issuance of Warrants



On January 5, 2005, the Company closed the second traunche of a private placement of its
common stock. Under the terms of the private placement, the Company sold 1,420,462 shares of common stock at $3.25 per share. In addition, the Company granted 366,653 warrants, each which is exercisable immediately to purchase one share of common
stock at an exercise price ranging from $4.05 to $4.06 per share and has a term of 36 months. The total funds raised in the private placement totaled approximately $4.6 million.



EXERCISE OF WARRANTS



During the quarter ended March 31, 2005, the Company received $2,500 for the exercise of warrants associated with 25,000 shares of the
Companys common stock. In addition, 6,912 warrants were exchanged at prices ranging from $0.29 to $0.41 per share, for 6,385 shares of Common Stock.



G. SEGMENT INFORMATION



The Company views its operations and manages its business as one segment, the development and marketing of Tb4. Factors used to identify the Companys single operating segment include the financial information available for evaluation by the chief operating decision maker in making
decisions about how to allocate resources and assess performance.



H. OTHER



In March 2005 the Company was listed on the American Stock Exchange, ticker symbol: RGN.



8



---

##### Table of Contents

ITEM 2. Managements Discussion and Analysis or Plan of Operation



This item should be read in conjunction with the unaudited financial statements and notes thereto of the Company contained in Item 1 of this report.



Plan of Operation



Since its inception in 1982, RegeneRxs activities had consisted of conducting research and development, sponsoring clinical trials of its
proprietary products, the construction and equipping of laboratory and production facilities, and the manufacture of products for research, testing and clinical trials. In 2000, RegeneRx adopted a modified business plan calling on the outsourcing of
most of the activities necessary to its mission of developing its Thymosin beta 4 (Tb4) platform for the treatment of chronic wounds. This
business model allows for the rapid and effective deployment of necessary resources without the burden of expensive and unwieldy infrastructure. It also allows the company to expand or contract its efforts depending on capital resources or other
circumstances. RegeneRx has not generated revenues from operations and does not anticipate generating product revenues or other revenues from operations for the foreseeable future. During the first three months of 2005, RegeneRx had no revenues and
had operating losses of $925,023. RegeneRxs accumulated deficit of $43,403,952 through March 31, 2005 has been funded primarily by the proceeds from the issuance of equity securities (and interest earned on such funds), the licensing of
technology developed or acquired by RegeneRx, limited product sales and royalties, and the sale of royalty rights. RegeneRx will require substantial funding in order to complete research and development activities, manufacturing for clinical trials,
and the eventual marketing of any products that RegeneRx intends to develop.



On June 11, 2003, RegeneRx completed the sale of 3,184,713 shares of restricted common stock pursuant to a private placement at a price of $.628 per share to Defiante Farmaceutica, L.d.a., a Portuguese company that is
a wholly owned subsidiary of Sigma-Tau, S.p.A., a pharmaceutical company headquartered in Rome, Italy. RegeneRx received approximately $2.0 million in proceeds. In addition, RegeneRx granted Defiante warrants to purchase up to $1.5 million of
additional restricted common stock of RegeneRx at prices ranging from $1.00 to $1.25 per share (or higher under certain circumstances) over a period of 18 months. Defiante exercised its $1.5 million of warrants early in return for 1,382,488 shares
of common stock on September 9, 2004.



On January 23, 2004,
RegeneRx completed the sale of 2,393,580 shares of common stock pursuant to a private placement at a price of $.95 per share to Defiante and several private investors. RegeneRx received approximately $2.3 million in proceeds. In addition, RegeneRx
granted investors warrants to purchase 1 share of common stock for every 4 shares of common stock purchased in the offering at a price of $1.50 per share over a period of 30 months. RegeneRx registered the shares and the shares underlying the
warrants purchased in this private placement as part of a registration statement on Form SB-2, which was declared effective by the SEC on July 20, 2004.



On January 7, 2005, RegeneRx completed the sale of an aggregate of approximately $5.8 million of common stock in a private placement transaction. ($1.2
million was completed in December 2004 and $4.6 million was completed in January 2005.) RegeneRx also issued warrants to investors to purchase over a period of three years up to an aggregate of an additional 462,808 shares of RegeneRx common stock
at prices ranging from $4.05 to $4.06 per share. RegeneRx registered the shares and the shares underlying the warrants purchased in this private placement as part of a registration statement on Form S-3, which was declared effective by the SEC on
February 14, 2005.



Although RegeneRx has no products that have
received regulatory approval to date, RegeneRxs Investigational New Drug Application was accepted by the United States Food and Drug Administration in December 2002 allowing RegeneRx to commence the human testing of Tb4 for dermal wounds. RegeneRx initiated a Phase I human clinical trial in March 2003, which studies were designed to establish safety in human subjects, and successfully
completed the trial in September 2003. There were no significant adverse events associated with the drug in Phase I and results demonstrated it was well tolerated by all subjects. RegeneRx has recently raised additional capital for Phase II trials,
the first of which was cleared by FDA in November 2004. In the first quarter of



9



---

##### Table of Contents

2005, two additional dermal Phase II trials were cleared by FDA, including a trial to study patients with epidermolysis
bullosa, an orphan disease. RegeneRx believes the Phase II trials, which it hopes to conduct in a somewhat parallel fashion, will take approximately 12-18 months each and will cost just over $2 million. RegeneRx plans to independently develop
Tb4 in the United States for chronic dermal wounds through the end of Phase II or Phase III clinical trials.



In November 2004, based on a scientific paper published in the journal,
Nature, showing that Tb4 was effective in protecting or repairing the heart after a heart attack in animals, the Company decided to additionally
pursue this indication. RegeneRx expects to meet with the FDA to discuss its plans at the earliest practicable time and initiate Phase I/II as soon as possible thereafter. RegeneRx has targeted the end of 2005 or early 2006 to file an IND for this
indication.



On January 22, 2004, RegeneRx exclusively
licensed certain European rights to Tb4 to Defiante. Defiante will develop Tb4 for internal and external wounds in Europe and certain other contiguous and geographically relevant countries. The Agreement expires on a country-by-country basis upon the later of the expiration of the last to
expire of any granted patent in the territory having at least one valid claim covering the products then on the market, the expiration of any other exclusive or proprietary marketing rights or twelve years from the effective date.



Under the Agreement, Defiante will pay RegeneRx a royalty on commercial sales
and will purchase all required Tb4 from RegeneRx on an exclusive basis. When RegeneRx completes positive Phase II clinical trials in the United States,
Defiante must either pay RegeneRx $5 million or initiate pivotal Phase III clinical trials in Europe to maintain the license. Defiante also will be obligated to attain future clinical and regulatory milestones in the licensed territory. As those
milestones are obtained, certain performance criteria regarding commercial registration and minimum annual royalties will be required in each licensed country. The agreement does not prevent RegeneRx from sublicensing the technology in countries
outside the licensed territory, and has no impact on any U.S. rights.



At March 31, 2005, RegeneRx had cash and cash equivalents totaling $6,223,078 and working capital of $5,915,282 and total assets were $6,766,090. RegeneRx believes that its cash balances will be sufficient to sustain current operations at
least through March 31, 2006. RegeneRx is currently considering several potential financing alternatives for expansion of its research, development and clinical trials programs. There is no assurance that RegeneRx will be able to raise additional
capital necessary to timely execute its current plan of operation or continue such a plan of operation beyond March 31, 2006 unless substantial additional capital is raised.



As RegeneRx utilizes a virtual company strategy, it does not currently expect to purchase or sell any properties or
significant equipment and does not expect to have significant changes in the number of its employees. For more information about RegeneRxs virtual company strategy, see Item 1. Business of the Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2004.



Forward-looking Statements



When used in this Form 10-QSB and in future filings by
the Company with the Securities and Exchange Commission, in the Companys press releases or other public or shareholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases
will likely result, are expected to, will continue, is anticipated, estimate, project or similar expressions are intended to identify forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainties, that could cause actual results to differ materially from historical results and those presently anticipated
or projected. The Company wishes to caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. The Company wishes to advise readers that various factors could affect the Companys
financial performance and could cause the Companys actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. These factors include, but are not
limited to, the following: the Companys lack of revenues and history of losses; uncertainties related to the Companys limited capital resources; risks associated with the development of the Companys products; uncertainties related
to the regulatory process; the Companys lack of



10



---

##### Table of Contents

product diversification; the Companys dependence on collaborative relationships with larger partners for the
development, manufacturing and marketing of its products; reliance upon key personnel; the Companys ability to obtain and protect intellectual property rights; and competition. The Company does not undertake, and specifically declines any
obligation, to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.



ITEM 3. Controls and Procedures



As of the end of the period covered by this report, based on an evaluation of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934)both of the chief
executive and chief financial officers of the Company have concluded that the Companys disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in its Exchange Act reports is recorded,
processed, summarized and reported within the applicable time periods specified by the SECs rules and forms.



There were no significant changes in the Companys internal controls or in any other factors that could significantly affect those controls
subsequent to the date of the most recent evaluation of the Companys internal controls by the Company, including any corrective actions with regard to any significant deficiencies or material weaknesses.



PART II  OTHER INFORMATION



Item 1. Legal Proceedings



None



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds



None



Item 3. Defaults Upon Senior Securities



None



Item 4. Submission of Matters to a Vote of Security Holders



None



Item 5. Other Information



None



11



---

##### Table of Contents

Item 6. Exhibits



|            |  |                                                                                                                                |  |                                                                                                          
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Exhibit                                                                                                         |  | Reference*                                                                                               
|3.1         |  | Restated Certificate of Incorporation of the Company                                                                           |  | Exhibit 3.1 to Registration Statement No. 33-9370, Amendment No. 1 (filed November 26, 1986)             
|            |  |                                                                                                                               
|3.2         |  | Amendment to Restated Certificate of Incorporation of Company                                                                  |  | Exhibit 3.2 to the Companys Transitional Report on Form 10-K, File No. 0-15070 (filed March 18, 1991)   
|            |  |                                                                                                                               
|3.3         |  | Amendment to Restated Certificate of Incorporation of Company                                                                  |  | Exhibit 3.3 to the Companys Form 10-KSB, File No. 0-15070 (filed April 2, 2001)                         
|            |  |                                                                                                                               
|3.4         |  | Bylaws of Company                                                                                                              |  | Exhibit 3.2 to Registration Statement No. 33-9370 (filed October 8, 1986)                                
|            |  |                                                                                                                               
|3.5         |  | Amendment No. 1 to Bylaws of Company adopted August 11, 1989                                                                   |  | Exhibit 4.7 to Registration Statement No. 33-34551, Amendment No. 3 (filed June 21, 1990)                
|            |  |                                                                                                                               
|3.6         |  | Amendment No. 2 to Bylaws of Company adopted June 18, 1990                                                                     |  | Exhibit 4.8 to Registration Statement No. 33-34551, Amendment No. 3 (filed June 21, 1990)                
|            |  |                                                                                                                               
|3.7         |  | Amendment No. 3 to Bylaws of Company adopted November 30, 1990                                                                 |  | Exhibit 3.6 to the Companys Transitional Report on Form 10-K, File No. 0-15070 (filed March 18, 1991)   
|            |  |                                                                                                                               
|4.1         |  | Form of Stock Certificate                                                                                                      |  | Exhibit 4.1 to Registration Statement No. 33-9370, Amendment No. 1 (filed November 26, 1986)             
|            |  |                                                                                                                               
|4.2         |  | Rights Agreement, dated as of April 29, 1994, between the Company and American Stock Transfer & Trust Company, as Rights Agent |  | Exhibit 1 to the Companys Current Report on Form 8-K, File No. 0-15070 (filed May 2, 1994)              
|            |  |                                                                                                                               
|4.3         |  | Warrant Agreement, dated March 12, 1997                                                                                        |  | Exhibit 4.3 to the Companys Annual Report on Form 10-K, File No. 0-15070 (filed March 31, 1997)         
|            |  |                                                                                                                               
|4.4         |  | Warrant Agreement, dated January 23, 2004                                                                                      |  | Exhibit 4 to the Companys Registration Statement on Form SB-2, File No. 333-113417 (filed March 9, 2004)
|            |  |                                                                                                                               
|10.1        |  | Patent License Agreement  Exclusive, between the U.S. Public Health Service and the Company                                   |  | Exhibit 10.1 to the Companys Form 10-KSB, File No. 0-15070 (filed April 2, 2001)**                      
|            |  |                                                                                                                               
|10.2        |  | Amended and Restated Directors Stock Option Plan                                                                               |  | Exhibit 10.25 to the Companys Annual Report on Form 10-K, File No. 0-15070 (filed March 26, 1993)       



12



---

##### Table of Contents

|      |  |                                                                                        |  |                                                                                                                                        
|----- |  | -------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                       
|10.3  |  | Amended and Restated 2000 Stock Option and Incentive Plan                              |  | Filed as Exhibit A to the Companys definitive proxy materials, File No. 0-15070 (filed May 20, 2002)                                  
|      |  |                                                                                       
|10.4  |  | Unit Purchase Agreement dated March 12, 1997                                           |  | Exhibit 10.25 to the Companys Annual Report on Form 10-K, File No. 0-15070 (filed March 31, 1997)                                     
|      |  |                                                                                       
|10.5  |  | Registration Rights Agreement, dated March 12, 1997                                    |  | Exhibit 10.26 to the Companys Annual Report of Form 10-K, File No. 0-15070 (filed March 31, 1997)                                     
|      |  |                                                                                       
|10.6  |  | Lease Agreement dated April 5, 2002 between the Company and HQ Global Workplaces, Inc. |  | Exhibit 10.7 to the Companys Annual Report on Form 10-KSB, File No. 0-15070 (filed March 31, 2003)                                    
|      |  |                                                                                       
|10.7  |  | Employment Agreement                                                                   |  | Exhibit 10.8 to the Companys Registration Statement on Form SB-2, File No. 333-113417 (filed March 9, 2004)                           
|      |  |                                                                                       
|10.8  |  | Employment Agreement                                                                   |  | Exhibit 10.9 to the Companys Registration Statement on Form SB-2, File No. 333-113417 (filed March 9, 2004)                           
|      |  |                                                                                       
|10.9  |  | License Agreement                                                                      |  | Exhibit 10.10 to the Companys Registration Statement on Form SB-2, File No. 333-113417 (filed March 9, 2004) **                       
|      |  |                                                                                       
|10.10 |  | Securities Purchase Agreement                                                          |  | Exhibit 10.11 to the Companys Registration Statement on Form SB-2, File No. 333-113417 (filed March 9, 2004)                          
|      |  |                                                                                       
|10.11 |  | Master Services Agreement                                                              |  | Exhibit 10.12 to the Companys Registration Statement on Form SB-2, Amendment No. 1, File No. 333-113417 (filed April 23, 2004)        
|      |  |                                                                                       
|31.1  |  | Certification dated May 13, 2005                                                       |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)                                               
|      |  |                                                                                       
|31.2  |  | Certification dated May 13, 2005                                                       |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)                                               
|      |  |                                                                                       
|32.1  |  | Certification dated May 13, 2005                                                       |  | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|      |  |                                                                                       
|32.2  |  | Certification dated May 13, 2005                                                       |  | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)

---

|* | Except where noted, the exhibits referred to in this column have heretofore been filed with the Securities and Exchange Commission as exhibits to the documents indicated and are
hereby incorporated by reference thereto. The Registration Statements referred to are Registration Statements of the Company.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|** | Portions of this document have been omitted pursuant to a request for confidential treatment.
|-- | ---------------------------------------------------------------------------------------------



13



---

##### Table of Contents

SIGNATURES



In accordance with the
requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                   |  |                                      
|------------------ |  | -------------------------------------
|                   |  | RegeneRx Biopharmaceuticals, Inc.    
|                   |  | (Registrant)                         
|                   | 
|Date: May 13, 2005 |  | /s/ J.J. Finkelstein                 
|                   |  | J.J. Finkelstein                     
|                   |  | President and Chief Executive Officer
|                   | 
|                   |  | /s/ C. Neil Lyons                    
|                   |  | C. Neil Lyons                        
|                   |  | Chief Financial Officer              



14